Tea for two as Miyazawa sets out to woo EC

IT WAS no coincidence that Kiichi Miyazawa, Japan's Prime Minister, chose to precede his EC summit meeting at Downing Street today by having a cup of tea in the Hyde Park Hotel yesterday with Margaret Thatcher.

The Japanese leader's aim in his talks today with Jacques Delors, the Commission President, and John Major, the current chairman of the European Council, must be to use the mutual admiration between Japan and Britain to foster more cordial dealings between his country and the rest of the Community.

A Japanese spokesman yesterday denied that there was anything more to the Thatcher meeting than a wish to stay in touch with a respected former prime minister. But he added: 'We expect to develop our relations with the EC based on our good relations with the UK.'

British diplomats see this as both a compliment and an opportunity. Over the past few years, a series of rows inside the Community have exposed sharp differences between member states in approach to the Asian economic superpower.

Britain has taken a co-operative, largely free-trading line; other countries like France have led an attack on Japan, claiming that it is an unfair trader, and, in the famous words of Edith Cresson, the former French Prime Minister, that the Japanese 'stay up at night thinking of ways to screw us'.

In the past year, the British view has come to prevail. Calls for protection have been more muted. And when the EC foreign ministers discussed Japan in June, they produced conclusions 'that the UK could have written itself', said a British diplomat last night. 'The idea has finally got through that relations with Japan are not a zero-sum game.' One thing that has eased this transition is European politicians' greater knowledge of Japan.

The aim of today's meeting is to put flesh on the bones of a new bilateral relationship established between Japan and the EC at a summit in The Hague last summer. The two sides agreed then to stop concentrating only on trade frictions; instead, they resolved to have a broader political dialogue, and to co-operate at working level on a wider variety of policy issues.

All the same, trade may raise its ugly head. After four years in which European exports to Japan rose by 25 per cent a year, largely because of booming sales of luxury goods, Japan's trade surplus with the EC widened in 1991 to dollars 27.4bn ( pounds 16bn). This is attributed to the continued strength of Japanese exports while demand at home in Japan has slumped as the country slips towards recession.

'There is a danger that they will want to talk about warm co- operation and woolly dialogue, while forgetting the crunchy economic issues,' a European diplomat said yesterday. Commission officials want to make sure that they keep up the pressure on Japan to open its financial market further, and prevent two trade agreements signed this year between Japan and the US from hurting European exports to Japan. 'From a legal point of view, the deals on semi-conductors and car parts are not discriminatory, but the underlying industrial commonsense is that the US expects to get a bigger share of the Japanese market,' he added.

Both sides hope to avoid a repeat of last year's damaging row over Japanese car sales in Europe. Although confusion remains over whether the agreement between the two sides does or does not include cars made in Europe by Japanese companies, Messrs Miyazawa and Major will be anxious to play it down. Perhaps surprisingly, the same is true of Mr Delors. 'We've put nothing in his file about cars,' insisted one of the advisers to the Commission President yesterday.